Wantagh, NY – George Athanasatos, principal of Madison Dean, Inc., has been ordered to pay nearly $460,000 in restitution and penalties for defrauding customers through a foreign currency (forex) trading scheme. The U.S. Commodity Futures Trading Commission (CFTC) secured a federal court order on March 11, 2013, against Athanasatos and his company, Madison Dean, Inc., based in Wantagh, New York.
Judge Joseph F. Bianco of the U.S. District Court for the Eastern District of New York entered a Consent Order of Permanent Injunction, requiring Athanasatos and Madison Dean to jointly pay approximately $250,000 in restitution to the roughly 19 customers they defrauded. In addition to the restitution, Madison Dean faces a $1 million civil monetary penalty, while Athanasatos is personally liable for $210,000. Both are permanently banned from trading and registering with the CFTC, and are prohibited from violating anti-fraud provisions of the Commodity Exchange Act.
The charges stem from a complaint filed by the CFTC on May 8, 2012, alleging that Madison Dean and its principals fraudulently solicited investments totaling approximately $415,000 for managed forex trading accounts. The firm offered off-exchange, leveraged forex contracts to investors.
According to the Order, Athanasatos and Madison Dean misrepresented and omitted crucial information about the company’s history, performance, client base, and employee qualifications. This was done through a website, written materials, and direct solicitations, creating a false impression of a successful and established firm. After just over a year of operation, during which customers lost around $250,000 while Madison Dean collected $112,000 in commissions and fees, the company abruptly shut down without notifying customers or providing any means of contact.
The CFTC’s case against another Madison Dean principal, Laurence Dodge of Fresh Meadows, New York, is ongoing. The agency also acknowledged assistance received from the United Kingdom’s Financial Services Authority in the investigation.
Alan I. Edelman, James H. Holl, III, Michelle Bougas, Gretchen L. Lowe, and Vincent McGonagle of the CFTC’s Division of Enforcement led the investigation.
Source: CFTC.gov
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